Show Company had total operating expenses of $153,000 in 2014, which included
Depreciation Expense of $30,000. Also during 2014, prepaid expenses decreased by
$9,500 and accrued expenses increased by $8,500.
Instructions
Calculate the amount of cash payments for operating expenses in 2014 using the direct
method.
Answer:
Under a periodic inventory system, freight-in on merchandise purchases should be
charged to the Inventory account.
Answer:
Revenue received before services are performed and expenses paid before being used or
consumed are both initially recorded as liabilities.
Answer:
A lease may be classified as an ______________ lease or as a ____________ lease.
Answer:
Identifying is the process of keeping a chronological diary of events measured in dollars
and cents.
Answer:
An article recently appeared in the Wall Street Journal indicating that companies are
selling their receivables at a record rate. Why are companies selling their receivables?
Answer:
1> Drive-by Truckers prepares monthly financial statements. On July 1, the Supplies
account had a balance of $3,000. During July, additional supplies were purchased for
$4,800 and that amount was debited to Supplies Expense. On July 31, a physical count
of supplies revealed that there was $2,000 on hand. Prepare the adjusting journal entry
that Drive-by Truckers should make on July 31.
2> Alesandro Rental Agency prepares monthly financial statements. On September 1, a
check for $9,000 was received from a tenant for six months’ rent. The full amount was
credited to Rent Revenue. Prepare the adjusting entry the company should make on
September 30.
Answer:
Instructions: Complete the partial worksheet presented below, inserting additional
labels as needed.
MILTON SERVICES AGENCY
Partial Worksheet
For the Month Ended September 30, 2015
‘”’”’”’”’”’”’”’”’”’”’”’”’”’”’”’”’”’”’”’”’”’”’”’”’”’”’”’”’”’”’”’”’”’”’”’”’”’”’”’”’”’”
Answer:
On January 1, Hamm Company purchased as an investment a $1,000, 6% bond for
$1,020. The bond pays interest on January 1 and July 1. What is the entry to record the
interest accrual on December 31?
Answer: